Question

Explain any three problems of public sector undertakings in India.

Explain three problems faced by public sector undertakings in India. 

Answer 1

The main problems faced by public sector enterprises are discussed below.

1. Lack of Incentive: The government servants do not have the same incentive to do their best as a man in private enterprise has. In the government service, promotion is awarded simply by seniority and not by merit. They are least concerned with the profit of the enterprises. Indiscipline and lack of responsibility among the workers, frequent labour unrest and bad relationships between the management and the workers also paralyse many public sector enterprises.
2. Wasteful Expenditure: There is a great deal of waste in the expenditures. Government funds and property are used carelessly by government officials and other servants, increasing the costs of production in these enterprises.
3. Corruption: Corruption, bribery and dishonesty are very common things in public enterprises.
4. Delay in Completion: Many public sector units take a long time to complete. The longer the period of completion, the lower the rate of return. Decisions are not taken and implemented in time, putting an extra burden on the country's scarce resources.
5. Technical Problems: Technical considerations have not been given due weightage in the establishment of public enterprises. The choice of location has been influenced less by technical and more by political considerations. The choice of technology has not always been rational and farsighted. In many cases, capital investment has been excessive.